climate change · 2019-08-30 · the company’s adaptation to climate change. analysis and...

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I ACCIONA'S COMMITMENT

CLIMATE CHANGE

Climate ChangeACCIONA is a carbon-neutral company. It directs its investments towards projects that contribute positively to meeting the reduction targets set out in the Paris Agreement. It carries out its operations while striving for energy efficiency and incorporating the consumption of renewable energy. Offsetting emissions that cannot be reduced is carried out by purchasing CO2 credits from renewable facilities in developing countries.

M A I NC H A L L E N G E S2 0 1 9

H I G H L I G H T SI N2 0 1 8

Achievement of carbon neutrality by offsetting 100 % of emissions that could not be reduced.

Setting science-based emission reduction targets (SBT).

Reducing GHG emissions by 7 % compared to 2017.

Internal price of carbon used in the analysis of new investments or projects.

Updated the dossier of global measures for the company’s adaptation to climate change.

Analysis and publication of climate risks and opportunities, following the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD).

Maintaining carbon neutrality in 2019.

Methodology review of the inventories and pathways to reduce emissions according to science-based targets.

Reducing GHG emissions in line with the science-based target, compared to the 2017 figure.

Using the internal price of carbon in the analysis of possible new investments or projects.

Consolidating climate change adaptation plans for each of the company's businesses.

Progress on the analysis and reporting of risks and opportunities associated with climate change, following the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD).

C A R B O N N E U T R A L

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SUSTAINABILITY REPORT

Risks and opportunities associated with climate change

Protagonists of the transition

ACCIONA's business model is designed with the purpose of being the reference operator in connecting capital markets with the development and operation of infrastructure that enables people’s prosperity.

The company is organizated to operate in the competence areas of infrastructure, water and energy, striving to provide innovative solutions that drive real progress. The activities it carries out contribute to generating or mitigating greenhouse gas (GHG) emissions, primarily in terms of the following:

• ACCIONA produces and sells renewable energy, helping with the displacement of fossil fuels in electricity production.

• The company carries out infrastructure projects with energy-intensive project phases due to the use of heavy machinery.

• In recent years, the number of energy-intensive desalination projects has risen, although they use only the most efficient technology on the market: reverse osmosis.

The business model also significantly contributes to help local communities adapt to climate challenges:

• ACCIONA constructs, operates and maintains new purification, wastewater treatment and desalination plants, yielding a higher level of access to water. Many regions will see a swell in water needs, according to all of the physical climate scenarios.

MITIGATING CLIMATE CHANGE THROUGH EXCLUSIVELY RENEWABLE ENERGY GENERATION

Thanks to its technical and economic competitiveness, investment in renewable energies has become the best long-term sustainable energy solution. In the transition, ACCIONA contributes to the displacement of current fossil fuels in the national electricity mixes. The accelerated global rollout of renewable energy sources is one of the main keys to complying with the commitment set out in the Paris Agreement.

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CLIMATE CHANGE

BALANCE BETWEEN MITIGATION AND ADAPTATION TO CLIMATE CHANGE THROUGH EFFICIENT WATER DESALINATION

ACCIONA's most carbon-intense activity is water desalination. This activity is seeing a sharp increase in MENA (the Middle East and North Africa). It is estimated that the production of desalinated water in this region will be 13 times greater in 2040 than in 2014, due to climate change and a rising population. As such, desalination is a solution for adapting to climate change and a potential hindrance for mitigation.

ACCIONA only desalinates water using reverse osmosis technology. The use of this technology involves around 6.5 times less greenhouse gas emissions than existing thermal desalination technologies in this region, and around 4.5 times less than the average of all the technologies. The emissions ratio is even less than the estimate for the region in a 2°C scenario (450 Scenario of the IEA) by 2040.

This year, the company has desalinated 204 hm³ in MENA, thus contributing to adaptation in balance with the need for mitigation. ACCIONA will continue to contribute by increasing its production in the coming years.

Source: IEA World Energy Outlook (2016) and own analysis

MENA region

ACCIONA in MENA

(Emissions ratio kgCO2e/m3)

DESALINATION SCENARIO IN THE MIDDLE EAST AND NORTH AFRICA

0.0

2.5

5.0

7.5

10.0

2014 2018 2040

Average of the technologies in MENA in 2014

ACCIONA technologies in 2018 Target ACCIONA

estimated

Target450 Scenario

In line with the overall economy decarbonisation targets

The company is in line with the full decarbonisation targets for the economy through public commitments, policies, specific procedures, public targets and an incentive model for the management of the company.

ACCIONA's climate change policy is approved by its Board of Directors and makes leading the transition towards low-carbon business models a priority. This guideline manifests itself through the following aims and principles:

• To be a carbon neutral company. Since 2016, all of the greenhouse gas emissions released into the atmosphere that could not be reduced have been offset through the cancellation of certified carbon credits.

• To reduce own emissions and those of its supply chain by 16 % between 2017 and 2030, aligning itself with the requirements established by science to maintain the global temperature rise below 2°C.

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• To develop projects, products and services that contribute to decreasing greenhouse gases, thereby facilitating access to renewable energy.

• To promote the adaptation to climate change,

facilitating access to water and resilient infrastructure.

ACCIONA promotes setting a carbon price that helps redirect government and business investment towards cleaner production and consumption models. This activity is conveyed through active public participation in international initiatives such as the Alliance of CEO Climate Leaders or the Carbon Pricing Leadership Coalition.

Climate action

During 2018, 69 % of the company's EBITDA actively contributed to mitigating and adapting to climate change, having generated in 2018 a total of 22,087 GWh of renewable electricity that avoid 14.7 million t CO2e. In addition, it provided access to water and sanitation to communities through the treatment of 790 hm³.

ACCIONA has met its emission reduction targets, lowering the CO2e of its scopes 1 and 2 by 7 % compared to 2017, and reducing its suppliers' scope 3 emissions1 by 41 %. This progress has been achieved through the consumption of renewable energy and by implementing energy efficiency measures, such as:

• Using B20 biodiesel for all of the existing static equipment in the Dubai Metro Red Line project;

• Reducing energy consumption by implementing standard ISO 50001 in its water treatment centres; and

• Reducing waste transport emissions due to a drop in their generation.

ACCIONA's climate action is also reflected in how it manages climate risks. In 2018, each business of the company prepared a Climate Change Adaptation and Risk Management Plan, which serves as a framework for carrying out and monitoring adaptation activities.

1 Categories: Purchased goods and services, Capital goods, Fuel and energy-related activities and Upstream transportation and distribution

2018 DOSSIER OF GLOBAL MEASURES FOR ADAPTATION TO CLIMATE CHANGE

In support of climate risk management, the 2018 Dossier of global measures for adaptation to climate change was drafted. Through the analysis of 89 climate vulnerabilities, the document proposes 71 solutions for adaptation, of which at least 25 are already being incorporated into the business lines. The dossier covers the adoption of measures in fields like water management, the use of new materials, the redefinition of designs, the use of climate monitoring systems or energy storage, and includes an approximate calculation of the expense deriving from their implementation.

Management of climate change risks

The company develops a top-down analysis of climate scenarios, risks and opportunities, whereby it interrelates the most significant climate hazards with the geographical exposure and vulnerability of the company's activities. 2°C scenarios and others resulting from the policies planned by the countries currently in the NDCs (Nationally Determined Contributions) undergo qualitative and quantitative studies with a view to increasing the robustness and resilience of the company. These scenarios are considered the most appropriate for studying regulatory or physical impacts, respectively.

ACCIONA's activities are carried out in areas of the planet that are being affected by climate change. The business plans have incorporated a response plan to these emerging risks, like the potential reduction of runoff or the increased frequency of extreme weather events such as hurricanes and floods, etc.

60


CLIMATE CHANGE

The measures aimed at climate resilience are determined based on an analysis of different time projections for climate scenarios that enable risk management measures to be included, and also allow advantage to be taken of the opportunities to transition to low-carbon economic models.

Tolerance thresholds have been established, which are used to identify, assess, prioritise and report to ACCIONA's decision-making bodies, including a calculation of potential short-, medium- and long-term impacts that climate change could generate.

Various tools are used in this process:

• Maps for identifying climate hazards from reputable sources,

• Financial analyses of the company,

• Monitoring GHG emissions at ACCIONA centres,

• Tools for identifying legal requirements,

• Environmental and social impact management procedures, and

• The first-hand experience of risk assessment groups.

The risks identified are evaluated according to the likelihood of their occurrence and their economic and reputational consequence. These two variables finally determine a risk level. For higher risks, a specific mitigation file is created.

The climate risk management process takes place on a business level and is conducted annually. It is integrated into ACCIONA's general risk management process.

KEY CLIMATE RISKS

CONSEQUENCE

LIK

ELI

HO

OD

3

3

3

1 3

2 3

Very high or Critical risk

High risk

Medium risk Low or Very Low risk

2

1

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No. Category DescriptionType of Impact Business

Risk management and mitigation

PhysicalReduced hydro-generation in Spain due to the reduction in runoff. A high risk in the long term is identified.

Revenues ACCIONA Energy

Monitoring and control processes are being implemented on the changes in production and management of reservoirs with meteorological forecasting in order to better plan and manage the reservoirs.

Physical

Increase in the number of stoppages at the Gulf of Mexico wind farms owing to the greater frequency and intensity of hurricanes and floods. A medium risk in the long term is identified.


Foundations are being elevated and insurance has been taken out against risks resulting from catastrophic events.

Physical

Economic penalties for failure to comply with established deadlines with customers due to the reduced availability of working days because of extreme weather phenomena. Medium risk in the long term.

Expenditures ACCIONA Construction

Transference: acquiring insurance.

Creation in 2019 of a working group to verify the existing degree of coverage.

1

2

3

Category DescriptionType of Impact Business Opportunity management

Products and services

Increase in the demand for renewable generation infrastructure because of regulatory changes on climate change. The legislation included in the European Union's 'Clean Energy for All Europeans' package and other laws passed in Australia, Mexico and Chile, among other countries, pose an opportunity in the short, medium and long term.


As per the SMP 2020 commitment: Investment of USD 2,500 million from 2016 to 2020 in renewable generation to achieve a total capacity of 10,500 MW.

USD 1,442 million accumulated CAPEX ACCIONA Energy from 2016 to 2018 achieving a total installed capacity of 9,627 MW by 2018.

Products and services

Increase in the demand for water treatment infrastructure in regions projecting an increase in scarcity due to climate change.

Opportunity in the short, medium and long term.

Revenues ACCIONA Agua

Investment: Creation of infrastructure that providewater to 4 million people and operating others that serve over 5 million.

Water treated in 2018: 790 hm³.

KEY CLIMATE OPPORTUNITIES

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CLIMATE CHANGE

Key climate indicators2

Emissions generated

Calculation of emissions generated

The emissions generated are calculated according to the criteria defined in the GHG Protocol, under the financial control scheme, consolidating as CO2 equivalent emissions corresponding to all GHGs relevant for the company: CO2, CH4, N2O, HFC and SF6. The criterion for the consolidation of energy consumption and other emissions follows the same accounting criterion.

The conversion factors used are those indicated by:

• The Intergovernmental Panel on Climate Change (IPCC), in the 2006 IPCC Directives for GHG inventories.

• National Inventory of Greenhouse Gases (GHGs) of Spain.

• International Energy Agency.

• Red Eléctrica de España (Electricity grid operator of Spain).

• ACCIONA Green Energy.

• Department for Environment, Food and Rural Affairs of the United Kingdom.

• The European Environment Agency.

Scope 1 and 2 emissions

GHG EMISSIONS DROPPED BY 7 % IN 2018

2 In order to address the TCFD and GRI recommendations, the rest of this climate change chapter provides information on the various metrics used by the company in terms of energy and greenhouse gas emissions.

Other metrics relevant to climate risks, such as the indicators on water and waste and the percentage of green activity, can be found in the Environment chapter. The information on remuneration related to sustainability targets, including climate change, is contained in the chapter 'People'.

The total CO2e emissions from Scopes 1 and 2 generated in 2018 were 437,614 tonnes, 131,685 t CO2e of which correspond to Scope 1, and 305,929 t CO2e to Scope 2 market-based (and 389,045 t CO2e of scope 2 location-based).

In 2018, the company had a science-based target to reduce GHG emissions under scope 1 and 2 by 1.23 % compared to the previous year, having reduced it by 7 %.

At the Paris climate summit, ACCIONA made a commitment to be a carbon-neutral company as part of its strategic objective of mitigating climate change. As such, since 2016, all of the emissions released into the atmosphere from greenhouses gases that could not be reduced have been offset by cancelling certified carbon credits.

EVOLUTION OF THE EMISSIONS GENERATED

Scope 1

Scope 2

(Thousands of t CO₂e)

* Historic C02e data recalculated (as stipulated by the GHG Protocol), due to the fact that Trasmediterranea was deconsolidated from ACCIONA in 2018 and that two centres with significant consumption are no longer attributable to ACCIONA according to energy-management responsibilities agreements and to the emissions apportioning criterion of publicly owned plants consolidated under a scheme of financial control, as per the GHG Protocol: Corporate Standard for U.S. Public Sector Organizations”.

2018

132

306

2017

153

318

2015

177

80

2016

227

118

63


ACCIONA’s carbon intensity was 58 t CO2e/€M of sales (scopes 1 and 2). As for the company’s buildings, the ratio of CO2 emissions was 18 kg CO2e/m².

* Historic C02e data recalculated (as stipulated by the GHG Protocol), due to the fact that Trasmediterranea was deconsolidated from ACCIONA in 2018 and that two centres with significant consumption are no longer attributable to ACCIONA according to energy-management responsibilities agreements and to the emissions apportioning criterion of publicly owned plants consolidated under a scheme of financial control, as per the GHG Protocol: Corporate Standard for U.S. Public Sector Organizations”.

INTENSITY OF GHG EMISSIONS

(t CO2e/Sales)

Scope 3 emissions

In 2018, as with scopes 1 and 2, the company had a science-based target to reduce scope 3 GHG emissions by 1.23 % compared to the previous year for all of the categories: 'Purchased goods and services, Capital goods, Energy-related activities (not scope 1 or scope 2) and Upstream transportation and distribution'. The Scope 3 emissions figure for these four categories decreased by 41 % compared to the previous year's figure. The reduction of Scope 3 emissions has been mainly motivated by the reduction of the emissions associated with suppliers. In this sense, ACCIONA has carried out works to improve the identification of purchase sectors which has resulted in a greater precision in the use of emission factors. Moreover, during last year purchases have been made to sectors that are less intensive in emission and the emission factors database has been updated, which is less carbon intensive on average. The decrease for all Scope 3 emissions was 37 %.

THE DECREASE FOR ALL SCOPE 3 EMISSIONS WAS

37 %

2015 2016 2017 2018

586558

39

64


CLIMATE CHANGE

2015 2016 2017 2018

ITEM

Upstream leased assets* 1,819** 1,819 2,177 10,332

Employee commuting* 48,768 (Offset)

50,536 55,568 61,958

Business travel 16,263 (Offset)

16,927 17,190 17,785

Waste generated in operations 14,859 22,057 14,861 10,451

End-of-life treatment of sold products 870 93 144 191

Use of sold products 1,666 488 10,677 54,657

Investments 2,119** 15,865 39,040 19,347

Purchased goods and services*

1,612,080 1,248,840

947,033 764,917

Capital goods* 630,764 299,156

Fuel and energy-related activities (not Scope 1 or Scope 2)* 147,461 25,109

Upstream transportation and distribution* 203,034 48,442

Total (tCO₂e)* 1,697,814*** 1,356,626 2,067,949 1,312,345

* Historic data for C02e recalculated as a result of the sale of Trasmediterranea in compliance with the GHG Protocol provisions.** Part of the 2015 emissions reported in upstream leased assets have been reassigned to Investments.*** 65,031 offset.

EVOLUTION OF SCOPE 3 EMISSIONS

(tCO₂e)

Other emissions

Global emissions of NOx in 2018 came to 1,767 tonnes; SOx were 248 tonnes and PM10 76 tonnes, decreasing by 88 %, 93 % and 92 % respectively compared to the previous year. The decreases in figures were mainly due

to the deconsolidation of the Trasmediterranea figures in 2018. SF6 emissions totalled 0.050 tonnes. In 2018, the company's target was to reduce these emissions in line with its GHG emissions reduction target. With regard to biogenic emissions, these generated 466,628 tCO2 in 2018.

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2015 2016 2017 2018

ITEM (t)

NOx* 9,590 12,298 14,683 1,767

SOx** 2,237 2,888 3,351 248

PM10*** 641 795 958 76

SF6 0.443 0.179 0.094 0.050

The data history includes the activity of Trasmediterranea, which, in 2018, was deconsolidated from ACCIONA and two centres whose representative consumption ceased to be attributed to ACCIONA, according to agreements pertaining to the energy-management responsibilities and the emissions apportioning criterion of the publicly owned plants, consolidated under a scheme of financial control, as per the GHG Protocol: Corporate Standard for U.S. Public Sector Organizations.

Deducting the activity of Trasmediterranea and the two centres mentioned, the figures would be: * 870 (2015); 1,299 (2016) and 1,802 (2017), ** 53 (2015); 140 (2016) and 186 (2017), *** 52 (2015); 37 (2016) and 80 (2017).

EVOLUTION OF OTHER EMISSIONS

(Tonnes)

Internal use of carbon pricing

Carbon pricing is a way to tackle the short/medium-term challenges that both regulatory entities and customers are going to establish in this regard. In 2018, ACCIONA developed an Internal use of carbon pricing guide, which explains the type of uses of carbon pricing that may be used to benefit the company's activities, each with its own goals, scope and pricing levels, such as:

• Offsetting price: the use of this price is the result of the company's commitment to being carbon-neutral since 2016. This price applied to all of ACCIONA's business units, which must pay according to the GHG emissions they generate, thereby promoting energy efficiency and the use of zero-emission energy sources.

• Shadow price: the price is based on the estimated cost to society of the externality of emitting greenhouse gases. The use of this level of price reveals the resilience to regulatory scenarios set out in the Paris Agreement.

Emissions avoided

In 2018, ACCIONA avoided the emission of 14.7 million tonnes of CO2e thanks to its 100 % renewable energy generation activity. During the past year, this same generation avoided the emission into the atmosphere of 12,534 t NOx, 51,022 t SOx and 357 t PM10. These emissions impact people's health, so avoiding them leads to healthcare savings.

14.7 MILLION TONNES OF CO2 EMISSIONS AVOIDED

(Millions of tonnes of CO₂)

EVOLUTION OF EMISSIONS AVOIDED BY ACCIONA

2018

14,7

2017

14,4

2015

17,2

2016

14,8

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CLIMATE CHANGE

Energy consumption

In 2018, the company’s energy consumption was 10,186 TJ (47 % less than in 2017), 56 % of which was from renewable sources. ACCIONA's aim was to reduce non-renewable energy consumption in line with its GHG emission reduction target.

2015 2016 2017 2018

Renewable* 6,013 6,510 5,740 5,698

• Fuels 4,275 4,357 4,384 4,712

• Electricity** 1,738 2,153 1,356 986

Non-renewable*** 7,204 9,488 13,331 4,488

• Fuels**** 5,666 7,432 8,787 1,692

• Electricity***** 1,538 2,056 4,544 2,796

Total (TJ)****** 13,217 15,998 19,071 10,186

The data history includes the activity of Trasmediterranea, which, in 2018, was deconsolidated from ACCIONA and two centres whose representative consumption ceased to be attributed to ACCIONA, according to agreements pertaining to the energy-management responsibilities and the emissions apportioning criterion of the publicly owned plants, consolidated under a scheme of financial control, as per the GHG Protocol: Corporate Standard for U.S. Public Sector Organizations.

Deducting the activity of Trasmediterranea and the two centres mentioned, the figures would be:* 5,989 (2015); 6,485 (2016) and 5,710 (2017).** 1,714 (2015); 2,128 (2016) and 1,326 (2017). *** 2,659 (2015); 3,489 (2016) and 4,864 (2017). **** 1,143 (2015); 1,585 (2016) and 2,002 (2017). **** 1,516 (2015); 1,905 (2016) and 2,843 (2017). ****** 8,647 (2015); 9,974 (2016) and 10,556 (2017).

EVOLUTION OF THE ENERGY CONSUMPTION

(TJ)

ENERGY CONSUMPTION BY SOURCE

(Percentage)

Electricity (grid mix)

Diesel oil

Natural gas

Other fossil fuels

Biomass Electricity (100 % renewable) Biogas Biodiesel

9.7 %3.1 % 0.1 %

27.4 %

14.4 %

43.1 %

1.6 %0.7 %

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The company’s energy intensity from fossil fuels was 0.6 TJ/€M of sales, while the energy intensity from renewable sources was 0.8 TJ/€M of sales. The energy consumption ratio of ACCIONA’s buildings totalled 150 kWh/m².

The data history includes the activity of Trasmediterranea, which, in 2018, was no longer part of ACCIONA.

Deducting the activity of Trasmediterranea and the two centres mentioned, the figures would be: * 33,112 (2015); 37,782 (2016) and 40,060 (2017). ** 668,233 (2015); 696,417 (2016) and 761,393 (2017). *** 26,643,961 (2015); 22,112,250 (2016) and 20,936,195 (2017). **** 27,838,729 (2015); 23,695,433 (2016) and 23,366,763 (2017).

***** Part of the 2015 consumption data reported in upstream leased assets has been reassigned to Investments.

EXTERNAL ENERGY CONSUMPTION

(GJ)

2015 2016 2017 2018

ITEM

Upstream leased assets* 1,882,043***** 2,376,162 1,815,757 145,453

Employee commuting** 681,871 696,541 788,330 853,119

Business travel 231,023 239,899 242,624 251,756

Waste generated in operations 200,520 293,148 197,506 138,896

End-of-life treatment of sold products 11,744 1,235 1,909 2,542

Use of sold products 21,005 6,437 836,599 622,020

Investments 29,130***** 308,264 350,478 423,611

Purchased goods and services***

31,080,198 23,270,929 21,891,112

11,327,661

Capital goods*** 4,231,087

Fuel and energy-related activities (not Scope 1 or Scope 2)*** 517,024

Upstream transportation and distribution*** 659,103

Total (GJ)**** 34,137,534 27,192,615 26,124,314 19,172,272

Third-party energy consumption

Below is the most significant energy consumption outside of the organisation, calculated in accordance with the company’s scope 3 categories.

In 2018, the company's aim was to reduce scope 3 energy consumption in line with its GHG emission reduction target.

climate change · 2019-08-30 · the company’s adaptation to climate change. analysis and...

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